The Thrift Savings Plan is weighing whether to let enrollees to convert their traditional investments to a Roth account, according to the board that oversees the retirement program.

The fiscal cliff law signed earlier this month allows the TSP and other plans to give enrollees the option to switch accounts. Participants would pay taxes on the amount converted to a Roth account. “We are currently waiting for tax reporting guidance from the [Internal Revenue Service] and will be studying the actions required to offer a conversion option,” according to a news update on TSP’s website. “After that review, we will make decisions on whether to proceed.”

The TSP Roth option, unveiled in May 2012, allows beneficiaries to invest money that already has been taxed and is not taxed again upon withdrawal, unlike traditional TSP investments. With Roth’s addition, participants now can invest pretax or after-tax dollars in any of TSP’s offerings as long as their total contributions are within the IRS limits. The IRS increased the cap on annual individual TSP contributions in 2013 from $17,000 to $17,500. Employees age 50 and older can contribute an additional $5,500 a year in catch-up contributions as long as their regular contributions for 2013 are expected to reach the $17,500 limit.

The pool of Roth participants is smaller than those with traditional investments, but it’s growing in popularity. As of December 2012, the TSP had nearly $100 million in Roth assets. The amount of money in the Roth pool doubled between September and the end of November, the board reported. “The pick up on Roth continues to be strong,” said Renee Wilder, director of the board’s Office of Enterprise Planning, during a December meeting. There are 73,041 enrollees with Roth balances, up from about 40,000 in August.

The TSP just launched an online calculator which allows enrollees to compare current and future Roth and traditional investments.

By using this service you agree not to post material that is obscene, harassing, defamatory, or
otherwise objectionable. Although GovExec.com does not monitor comments posted to this site (and
has no obligation to), it reserves the right to delete, edit, or move any material that it deems
to be in violation of this rule.